(See video clip below after my commentary or analysis)
This guy makes some very interesting points about the down sides of home ownership; but I think he's still whacked ... Even though as he points out that your down payment which will be "parked" into your home forever, or used when you trade up to another home, and will not be accessible to re-invest in other ways; and that real estate taxes which you'll pay over the life of your mortgage loan (15 or 30 years) and which are "hidden" in your PITI as part of your total mortgage payment can certainly add up to a large aggregate over the life of that mortgage or ownership interest in the property, along with other maintenance costs -- in the end or final analysis you ARE building equity over time and real estate property ownership is something that can be passed on to an heir; whereas what can you pass-on with rent or a lease? Nothing ! If you added up ALL the expenses of home ownership (mortgage interest, real estate taxes, repairs, etc) in the end you should still be far better off than with renting and at a minimum break even or have a large gain in equity/appreciation if you ever want or need to sell some time down the road. The exception to this assumption or case in point about "short sales" is where someone bought at the top of the roller coaster apex of the market, put little to nothing down, had an ARM loan, re-financed or pulled equity out on a HELOC or home improvement project, then the market crashed or receded a bit like the tide; then they could find themselves, as many home owners did in this recession, being upside-down in their loan. However, like the stock market, if you're in it for the long term and can weather through little dips or fluctuations in the market; in the end you'll come out a hell of alot better (not bitter LOL) than if you were just renting and flushing your money down the toilet each month.
One can also get a life insurance policy to pay off the mortgage in the event of an untimely passing; then any children or heirs, or surviving spouse, can own the home free and clear. Assuming the average person does not have bundles of cash saved up to invest in other ways or "diversify their financial portfolio", renting affords absolutely no return on investment whatsoever whereas real property ownership does by way of building equity in the property and appreciation. They're not "making any more land" by the way and with MASS immigration and natural population growth an abundance or surplus of real estate parcels for the taking at give away prices or for the "stealing" or homesteading is not going to happen.
Real estate ownership is a long terms investment strategy; whereas what this guy proposes by not owning and renting and using your extra bundles of cash (assuming you have such a nest egg) would be a short term investment strategy.
Another thing this nut job points out is that with career changes, TDY's or relocations; renting does afford you the opportunity to pack up and leave relatively quickly. Most leases, however, call for a minimum two (2) month advance notice if the tenant wishes to terminate the lease early; but depending on what your lease contract says it does not necessarily mean that you can just up and leave at a moments notice as this guy implies. What about KEEPING your property as an investment and renting it out while your gone ?? Have someone paying your mortgage payments for you and continue building equity in the property, while you rent elsewhere as needed. Of course being an out of state or area landlord does have it's risks and you may need to appoint a property manager or trusted friend or associate to handle any issues that might come up in your absence, such as that call from your tenant saying there is a repair issue or something. But with due diligence, selecting the right tenant, and having some funds set aside in an escrow account or savings account in reserves for repairs, to cover for tenant if they are late or cannot pay rent for a month or two, and other property management issues that could arise - it would be far more financially beneficial to rent your place out and keep it as an investment. Also if you sold just because of a job change or relocation and then went from owner to renter, you could get hit with Capital Gains taxes if you remain a renter. Funny that this guy didn't even cover these points or that the interviewer didn't ask him or make any counter arguments on rebuttal.
He makes some very interesting and perhaps valid points about rent vs buy; but I think he's still whacked and off base. Less stress in renting vs property ownership (as he says) perhaps; but a whole lot less return on your investment with renting too in the long run.
Ok, now watch the video and make up your own mind after hearing what he says and what I have said above....
(if video does not play correctly switch video mode to HD in embedded player)
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